Bualuang Securities stated that the global liquefied natural gas (LNG) market is likely to face significant supply shortages in 2026, with continued high prices projected through 2027. This follows Morgan Stanley’s latest revisions to its LNG market assumptions, including extended export disruptions from Qatar and the UAE, lasting two months and a prolonged outage of 2 trains at Ras Laffan (12.8mtpa) until 2028. Additionally, the North Field Expansion project is now expected to be delayed to mid-2027. As a result, the supply shortfall in 2026 is estimated at around 15 million tonnes, with forecasted LNG prices between $15–$30 per million Btu for 2026–2027.
With rising gas prices, switching economics in Asia are expected to favor alternatives such as coal, diesel, and propane, moving beyond the initial price shock. Morgan Stanley has consequently halved its forecast for gas demand growth over the next three years, as industrial users increasingly turn to oil, propane, and coal. This trend is seen as beneficial to refiners like Reliance, coal equipment companies like Indonesia’s United Tractors, and is expected to further tighten the Asian fuel markets, thereby supporting refinery margins.
In the utilities sector, Morgan Stanley has downgraded GAIL and Petronet LNG (PLNG) to Equal Weight (EW) due to continued weak demand sensitivity to gas prices. However, a more constructive outlook is given for Singapore utilities, with Sembcorp upgraded to Overweight (OW) following the rollover of spot power contracts.
For chemicals and fertilizers, Bualuang Securities sees higher margins as global cost curves rise with LNG and oil prices, highlighting Petronas Chemicals and PTTGC in Southeast Asia as preferred picks due to their strong domestic feedstock access and lower disruption risks. In contrast, Tata Chemicals faces a double downgrade to Underweight (UW) amidst higher energy costs and demand concerns.
PTTGC’s target price is upgraded to ฿43 (from ฿29) with an Overweight rating. Bualuang’s analysis reveals that PTTGC has secured sufficient feedstock for two months and 50% of its June supply. Imports from the Middle East account for just one shipment per month (10% of crude), and reliance on Dubai-benchmarked crude is limited. The company also benefits from feedstock flexibility, with supplies from Laos and increased domestic gas production from PTTEP, minimizing risks of state intervention in refinery pricing or gas supply.
PTTGC reports no signs of demand destruction, even across its specialty portfolios in the US and EU, and plans to hedge crude and product inventory to mitigate downside risks if oil prices decline in the future.
